"So we describe that as a thin market and we have to develop more innovation in the ways we go forward with education and we have to have an institution that has the capacity to actually do that."

Students who are currently enrolled at GippsTAFE and Advance TAFE will finish with a qualification from Federation Training.

The merger has also been supported with $40 million in State Government funding from the TAFE structural adjustment fund.

Half of that will be spent managing the merger and the other half will be spent upgrading facilities.

Unanswered questions about TAFE merger

But many questions about the future of skills training in Gippsland remain unanswered and are not likely to be addressed until the new board of the Federation Training is appointed.

It is not yet known how the merger will affect which courses are offered, staff numbers, and whether any of the 14 campuses across Gippsland will be closed.

The chairman of Advance TAFE, Scott Rossetti, does not expect to see mass campus closures.

"Federation University want to have presences in all of our areas," he said.

"They want to draw students into not only VET, but also to help them achieve even higher outcomes."

But he says there could be changes, including a shift to more online offerings.

"I think you'll see different campuses used in different ways," he said.

"That, for many in our community, is a good thing.

"If we ultimately get a lot of our course material delivered in other ways and have the students coming in less often, that makes accessing study for many in our remote communities much more accessible."

Education Union blames funding cuts for merger

The Australian Education Union has described the merger as a sad day for Gippsland.

Local organiser Jeff Gray fears the changes will lead to job cuts and more courses being shifted online.

He says State Government funding cuts to the TAFE sector forced the merger.

"The TAFEs did what they could to reduce staffing and that of course meant courses had to go," he said.

"But they found themselves in a position where they just cannot run their business, if you like, with the money that they had.

Mr Gray says GippsTAFE was $5 million in debt and Advance is in a similarly precarious position.

"So they've had to look very closely at where their future might lie under this current Government," he said.

"There's really little choice but to go ahead with a merger."

The Minister for Higher Education and Skills, Nick Wakeling, continues to deny the Government has slashed funding to TAFEs.

He says the merger was the decision of the three institutions.

"This is about the future of VET training within the Gippsland region and is a decision made by Federation University, by GippsTAFE and by Advance TAFE," he said.

"It's about creating a long-term education opportunity for Gippsland, and this is about providing an opportunity for more Gippslanders to train in their local community."